Chapter 12
Agency Agreements：Proposal, Negotiation and Closure
(代理协议：提议, 磋商及达成)

Section 1  Introduction
Section 2  Specimen letters
Section 3  Useful Expressions (Self study after class)
Section 4  Guide to Writing
Section 5  Exercises

Section 1  Introduction

A large volume of the world’s trade is conducted through the agency system.

A large company usually has its own export dept., and even establish its branches abroad. Small companies may find it economical to do foreign business through agents.

There are three types of agents: general agents, sole or exclusive agents, and ordinary or commission agents.

The principals (委托人) seeking agents abroad and prospective agents (未来的代理人) each have concerns about the other and need to negotiate terms of agency in a careful manner.

Section 2  Specimen Documents

     Specimen 1: Asking a firm or individual to represent you

We have been in touch with the consular section (领事处) of your Embassy (大使馆) at Beijing, which recommended your firm as a possible agent for porcelain ornaments (瓷器饰品) in Finland.

     We manufacture porcelain ornaments and hope to increase our exports to overseas markets. We are seeking an organization that can introduce and handle a considerable amount of business.

Kindly let us know if you are interested in representing us and if you consider (认为) that the volume of business you can obtain would warrant (确保) our granting you a sole agency (独家代理).

Our export price list, catalogue and a sheet giving full details of agency commission and terms are enclosed.

We look forward to hearing from you.

Specimen 2: Accepting an agency (a positive reply)

We are very pleased to receive your letter … offering us the agency for your porcelain ornaments (瓷器饰品). We are certainly willing to be your agents and sell your products throughout Finland.

When you draw up an agreement …, we suggest the inclusion of the following points:

We operate as a Sole Agent for a period of three years, after which period the contract will be renewed annually.

A commission of 7½% will be paid on all sales, whether from us or direct from customers.

Monthly accounts (账目) of sales will be kept and sent to you. We will accept your quarterly drafts (季度汇票) for the net amount.

We agree not to handle (经营) any imported competitive products.

All advertising expenditure for the first year will be refunded (返还) by you, thereafter to be divided equally between us.

All reasonable outlays (支出)  for postage, faxes, and trunk calls (长途电话)  will be refunded by you. Office expenses are payable by us.

We would be happy to discuss these points at your convenience and any other issues you may wish to raise.

Specimen 3: Manufacturer’s confirmation of agency terms

           We are pleased to learn … that you are willing to accept an agency for marketing our porcelain ornaments in Finland. ….. The terms agreed are as follows:

1. The agency will operate as from 1 January 2013 for a period of three years, subject to renewal (更新).

2. The agency will be the sole agency for marketing our goods in Finland.

3. No sales of competing products will be made in Finland either on your own account (以你自己的名义) or on account of any other firm or company.

4. All customers’ orders will be transmitted (传送) to us immediately for supply direct.

5. Credit terms (信用条件) will not be given or promised to any customer without our express consent (明确同意).

 

  Specimen 4: Offering a marketing agency

We understand that …, and we wish to offer our services with a view to marketing your products.

… we can offer unrivaled expertise (无与伦比的专业知识) in obtaining orders and handling sales because of the considerable experience already gained of dealing in textiles and leather merchandise of more than 15 years.

If you are interested in our proposal, we will be very pleased to provide bank and trade references (银行资信证明人和贸易资信证明人).  

We look forward to hearing from you.

Specimen 5: Letter of appointment (委任书) of agency

We have .. and we are pleased to grant you a consignment agency for the period of one and half years (January 1, 2013 ― June 30, 2014). After this period, the arrangement will be agreed annually.

A commission of 5 per cent will be paid on all sales made through you, and we will allow reasonable expenses incurred on our behalf.

Enclosed are our export catalog, price list, order forms, and two copies of the contract. We will supply you with goods on credit not exceeding €20,000. Payment should be made by draft (汇票).

Our Mr. Wang will be flying out to you on May 25 to agree the terms of the contract. He is authorized to sign on our behalf. You will shortly be hearing from the xxx Company (??? him) who will witness (见证) the signing of the contract documents.

We look forward to receiving your first order.